Mexico, Venezuela and Argentina affect growth in the region

22/01/2019

As a prelude to the start of the most important economic conference to be held in Davos, Switzerland, the International Monetary Fund (IMF) presented an advance of its Word Economic Outlook.

Christine Lagarde, director of the World Economic Forum, announced that the world economy will grow less this year by 3.5%. Photo: Social media

In Latin America and the Caribbean, prospects have a positive trend, taking into account that by 2018 an increase of 1.1% is expected; for this year of 2.2% and the next 2.5%. What shows a decline since the last report published in October 2018, but an ascending behavior.

The decreases, explained the document, are due to a reduction in Mexico of private investment, as well as a contraction even more severe than expected in Venezuela, and a fall that continues, in Argentina, which is expected to return to positive terrain in 2020. On Colombia there were no specific announcements, the most complete report of the region will be known on Friday, January 25.

Brazil is recognized as the country that neutralizes low forecasts due to the gradual recovery of its economy from a dark period of recession experienced between 2015 and 2016.

Global economy

The world economy will grow at a rate of 3.5% this year and in 2020, it will grow at 3.6% while it is expected that last year the world expanded 3.7%.

According to the director of the IMF, Christine Lagarde, these perspectives take into account the tensions that still remain in the global economy, referring to the additional tariffs imposed by China and the United States. She also said that these forecasts could be affected by the departure of the United Kingdom from the European Union, without an agreement, as well as a lower economic growth of China.

Lagarde ruled out being "around the corner from a recession," but did warn about the global risks that are latent and the message, she said, is clear to policymakers: "Address the ongoing vulnerability and be ready if the real reactivation materializes ".

To deal with the risky situation, Lagarde recalled that there are three keys: resilience, inclusion and cooperation. The first one makes reference to the fact that countries must reduce their public debts to face the deceleration as well as reinforce an independent monetary policy.

Inclusion is key to helping workers who will be displaced by automation, as well as creating new and better opportunities for women and youth.

And in the collaboration: "We must look at how we face the problems we share: the trade system, fight against corruption and tax evasion, and the risk of climate change," concluded Lagarde.